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  • Profile photo of tylon020tylon020
    Participant
    @tylon020
    Join Date: 2003
    Post Count: 23

    Hi Guys,

    I purchased a PPOR back in 2007 and for the last 10 years has been rented out. I wanted to sell the property to pay a second property off. I know moving back in won’t make a difference for CGT purposes but is any other way I can reduce or minimise it? Feels like such a loss.

    Profile photo of PTSMikePTSMike
    Participant
    @ptsmike
    Join Date: 2015
    Post Count: 8

    – consider whether you can use the six year main residence absence rule and the impact on any other property which may have been your main residence
    – why won’t moving back in make a difference for CGT purposes ?
    – look at third element costs to reduce the capital gain where appropriate
    – did you really move into it and make it your PPOR ?

    PTSMike | Property Tax Solutions
    http://www.propertytaxsolutions.com.au
    Email Me | Phone Me

    Property Investment Tax Accounting - Sydney | Melbourne | Brisbane | Perth | Adelaide

    Profile photo of JaxonJaxon
    Participant
    @jaxona
    Join Date: 2014
    Post Count: 282

    https://www.finder.com.au/capital-gains-tax-selling-property

    Main place of residence
    You can avoid paying CGT if you sell a dwelling that’s considered your main place of residence. You can only ever have one main residence at any given time unless you’re selling your old main residence and buying another. In this case you’re entitled to an overlap period of six months as long as the new property will be your new main residence, you lived in the old property for at least three continuous months in the 12 months before you sold it and it wasn’t used to produce rent in this same 12 month period. The ATO doesn’t give an exact description of what constitutes a main residence, but gives the following points to consider:

    You and your family live in the dwelling.
    Your mail is delivered there.
    You have your personal belongings there.
    You’re registered to vote at the property’s address.
    You have connected a phone, gas and electricity to the property.
    If you’ve lived in your home for the whole time you’ve owned it, haven’t rented it out either completely or to a lodger and the land is smaller than two hectares, you’ll get a full exemption on CGT when you sell. This is helpful if you plan to live the renovator’s life: selling your home, moving into another, renovating it and then selling the renovated property. And while you won’t make a rental income if you go down this path, all profits made from the renovation are exempt from CGT.

    Profile photo of JaxonJaxon
    Participant
    @jaxona
    Join Date: 2014
    Post Count: 282
    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    https://www.finder.com.au/capital-gains-tax-selling-property
    Main place of residence
    You can avoid paying CGT if you sell a dwelling that’s considered your main place of residence. You can only ever have one main residence at any given time unless you’re selling your old main residence and buying another. In this case you’re entitled to an overlap period of six months as long as the new property will be your new main residence, you lived in the old property for at least three continuous months in the 12 months before you sold it and it wasn’t used to produce rent in this same 12 month period. The ATO doesn’t give an exact description of what constitutes a main residence, but gives the following points to consider:
    You and your family live in the dwelling.
    Your mail is delivered there.
    You have your personal belongings there.
    You’re registered to vote at the property’s address.
    You have connected a phone, gas and electricity to the property.
    If you’ve lived in your home for the whole time you’ve owned it, haven’t rented it out either completely or to a lodger and the land is smaller than two hectares, you’ll get a full exemption on CGT when you sell. This is helpful if you plan to live the renovator’s life: selling your home, moving into another, renovating it and then selling the renovated property. And while you won’t make a rental income if you go down this path, all profits made from the renovation are exempt from CGT.

    2 potential errors in this quote Jaxon.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

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